On March 25 over 80 like-minded CFO’s and finance professionals came together for our annual CFO Accounting Update. It was great to be back enjoying a face to face event after so many virtual events.
Our expert speakers: Carmen Ridley, Travas Burns and David Prichard shared their insights on the ‘latest’ in their world. Here is snapshot of their presentations.
Principal – Australian Financial Reporting Solutions Pty Ltd Australian Accounting Standards Board Member (2012-2020) Member of IASB IFRS for SME implementation group
Carmen provided an update on a number of significant new accounting standards that are effective for the 30 June 2021 financial reporting period and its impact on the financial statements
- AASB 2018-6 Definition of a Business. The revised definition emphasizes that a business consists of inputs and processes applied to those inputs that have the ability to contribute to the creation of outputs. If the assets acquired are not a business, the reporting entity shall account for the transaction or other event as an asset acquisition and not as a business combination.
- AASB 2018-7 Definition of Material. Information is material if it could reasonably be expected to influence the decisions of the primary users of the financial statements. Often immaterial information clouds material information in the financial statements – remember, if it is not material get it out of the financial statements or better still, do not put it in the first place!
In the lead up to 30 June 2021, consideration will have to be given to impairment testing of recorded right of use assets at individual asset level, or at CGU level as cash outflows will no longer include lease and interest payments.
Lastly, an important reminder in relation to removal of special purpose financial statements applicable for the for-profit private sector. Entities will have to prepare general purpose financial statements from 30 June 2022, if required by legislation to prepare financial statements in accordance with Australian Accounting Standards, or if required by their constituting or other documents (such as a banking agreement) that was created or amended after 1 July 2021. Entities who early adopt the new reporting framework for period ending 30 June 2021 do not have to restate the comparatives (30 June 2020 balances).
If you would like more information on changes to accounting standards or information on special purpose changes please reach out to ESV.
Partner at ESV, Chartered Accountant and Certified Fraud Examiner
“No one wants fraud on their watch … unless they’re the one committing it”
We gained an insight into why people commit fraud through a case study and the behavioural red flags including …
- Living beyond their means
- Financial difficulties
- Close association with suppliers
- Control issues
- Family problems
- Wheeler-dealer attitude
Every business should actively prevent fraud by having robust policies and procedures, IT security plus education and training.
The most important message? Don’t let your business hit the headlines with misappropriated funds (think the recent NAB fraud) – be proactive. ESV has a fraud expert that can assist you to prevent, detect or respond.
Chartered Tax Adviser, Fellow of The Chartered Institute of Taxation (UK), and is an Affiliate member of Chartered Accountants Australia and New Zealand.
Many of the Covid incentives and measures the Government released are now coming to an end. However, you can still take advantage of ‘loss carry back’ which we have spoken about previously.
With the ATO playing Santa for much of 2020 they are now shifting their focus to compliance under their Tax Governance focus. What are the ATO looking for? Trust us they will look at you at some stage.
- Clear controls and processes within (corporate) governance framework
- Is the governance effective? Does it consistently result in the correct tax outcomes being achieved and obligations met?
- Templates / Copy and Paste?
- Practical & used documents v large “dusty” documents
- What factors are incorporated?
- Accountable management
- Recognise tax risks
- Seek advice
- Integrity in reporting
- Timely lodgements & payments
- Ethical & responsible behaviour
We are strongly suggesting that businesses look at their tax governance framework before the ATO come knocking. If you need someone to review what you have or assist in the creation of your framework, please reach out.
If you would like a copy of the slides or have any questions, please reach out to your ESV Engagement Partner.